ACC 304 WEEK 7 QUIZ 4
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ACC 304 WEEK 7 QUIZ 4
ACC 304 Week 7 Quiz 4 – STR NEW
ACC 304 Week 7 Quiz 4
All Questions Included.
TRUE-FALSE—Conceptual
1. Intangible assets derive their value
from the right (claim) to receive cash in the future.
2. Internally created intangibles are
recorded at cost.
3. Internally generated intangible assets are
initially recorded at fair value.
4. Amortization of limited-life intangible
assets should not be impacted by expected residual values.
5. Some intangible assets are not
required to be amortized every year.
6. Limited-life intangibles are
amortized by systematic charges to expense over their useful life.
7. The cost of acquiring a customer list
from another company is recorded as an intangible asset.
8. The cost of purchased patents should
be amortized over the remaining legal life of the patent.
9. If a new patent is acquired through
modification of an existing patent, the remaining book value of the original
patent may be amortized over the life of the new patent.
10. In a business combination, a company
assigns the cost, where possible, to the identifiable tangible and intangible
assets, with the remainder recorded as goodwill.
11. Internally generated goodwill should
not be capitalized in the accounts.
12. Internally generated goodwill
associated with a business may be recorded as an asset when a firm offer to
purchase that business unit has been received.
13. All intangibles are subject to
periodic consideration of impairment with corresponding potential write-downs.
14. If the fair value of an unlimited
life intangible other than goodwill is less than its book value, an impairment
loss must be recognized.
15. If market value of an impaired asset
recovers after an impairment has been recognized, the impairment may be
reversed in a subsequent period.
16. The same recoverability test that is
used for impairments of property, plant, and equipment is used for impairments
of indefinite-life intangibles.
17. Periodic alterations to existing
products are an example of research and development costs.
18. Research and development costs that
result in patents may be capitalized to the extent of the fair value of the
patent.
19. Research and development costs are
recorded as an intangible asset if it is felt they will provide economic
benefits in future years.
20. Contra accounts must be reported for
intangible assets in a manner similar to accumu-lated depreciation and
property, plant, and equipment.
MULTIPLE CHOICE—Conceptual
21. Which of the following does not describe
intangible assets?
a. They lack physical existence.
b. They are financial instruments.
c. They provide long-term benefits.
d. They are classified as long-term assets.
22. Which of the following
characteristics do intangible assets possess?
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